S&P Global (SPGI) is on track to post better-than-expected Q2 results after a rebound in June credit issuance supported confidence in full-year guidance, Morgan Stanley said in a note Monday.

The firm said total Q2 issuance declined 7% from a year earlier, but June issuance rose 13%, helping offset weaker volumes in April and May.

Morgan Stanley now expects S&P Global's Q2 ratings revenue to fall 2% year over year, a smaller decline than the previously estimated 5%.

"We think the quarter will shape up to be better-than-feared, given investor caution following soft credit markets in April and May," according to the note.

The firm raised its Q2 EPS estimate for S&P Global by 2% and said the company is likely to maintain its full-year outlook, supported by improved issuance trends in the second half.

Morgan Stanley increased its price target on S&P Global to $595 from $587 and reiterated an overweight rating.

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